Industry Report: Metcash Distribution Centre Supply Chain Analysis

This report provides a comprehensive analysis of the Metcash Distribution Centre, a major wholesale distribution company in Australia. It begins with an overview of Metcash's history, tracing its origins as a food store and its subsequent expansion. The report then delves into Metcash's diverse product offerings, including food, liquor, and hardware, and identifies its key customer segments, such as IGA and CSD (convenience stores). A central focus is the examination of Metcash's supply chain, including a diagram illustrating the flow of products from suppliers to the distribution center and ultimately to retail customers. The report highlights the role of key suppliers and explains the operational processes. Finally, it investigates Metcash's transportation network, emphasizing its partnership with DYERS and other subcontractors, and how this network facilitates product distribution nationally and internationally, supporting the company's extensive reach and operational efficiency. The report utilizes academic journal references and the Metcash official website as sources to strengthen the analysis.

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Supply Chain Management
Introduction
Metcash Distribution Centre is a wholesale distribution company whose headquarters are
located in Sydney, Australia (Hoffman & Babb). Similar studies reveal that Metcash distributes
wide ranges of products to different consumers within Australia and outside Australia. Joe David
established the company in the year 1927. Reports show that the company started as a food store
which was started by Joe David. Later on, David Joe established another six other food store.
Finally, those food stores contributed to the birth of Metcash.
This report aims at examining, the history of Metcash industry. The report will further
explore Metcash products, customers and suppliers. Moreover, the report will also investigate the
supply chain concerning Metcash Ltd. Finally, the discussion with articulate Metcash
transportation network locally and internationally
Organization history
Studies show that, David was motivated by great opportunities he encountered in the
wholesale business. He had located niche markets with more potential retailers whom he could
supply with his products. Research indicates that in 1980, Metcash attained AG Campbell’s
wholesale business (Hay & Murdoch, p.13). Moreover, the company established its primary
retail group in NSW. Hence, Metcash industry was aimed at providing retail services to
numerous retailers across the globe.
David used the discount formula to attract more customers to buy his products in 1957
(Hay & Murdoch, p.12). Moreover, he implemented various technological innovations which
aided in the development of Metcash. Such innovations included computerized punch-card,
which eased the inventory work. Research shows that Met cash was the first organization to

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utilize computerized punch card (Hay & Murdoch, p.13). Hence, in 1960, Metcash Ltd
established Supa Valu, a group of independent retailers.Thus, Supa Valu adopted the cooperative
food groups, which gave retailers more purchasing power since the resources were contained
together. Innovations were very crucial in Metcash; for instance, in 1972, Metcash established a
new distribution facility located in Blacktown.
Metcash distribution center deals with a different line of products. The company is the most
renowned wholesale inside and outside Australia dealing with Liquor, Food and grocery
products. Thus, Metcash sells a variety of food and household items such as vegetables, fruits,
deli platters, potato chips, ice creams, oils, aloe, organic food, cleansing bars and many more
(Dawson, p.26). The primary Metcash National and International products are:
 Food. Concerning food products, Metcash supplies more than 1,600 stores based in
Australia. Such stores include Foodland and IGA brands.
 Liquor. Studies show that Metcash is the most extensive supplies of Liquor within and
outside Australia. The company operates more than 2700 Liquor stores in Australia.
Similar studies show that the top Liquor brand includes- Thirsty Camel, Porters Liquor,
IGA Liquor and Cellarbrations (Browne & Levy, p.672).
 Hardware. Metcash have the most significant hardware market in Australia. The
company has a well-established hardware group that supply the hardware items to various
suppliers and customers. Statistics show that the company supply hardware items to more
than 1600 stores within Australia.
Metcash National & International Customers and suppliers
Metcash operates around three major business pillars, which include Australian Liquor
Marketers, IGA Distribution and Campbell’s’ cash and Carry (Sutton, Kamvounias & Taylor,

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p.125). Studies show that IGA deals with eight distribution Centre’s, which are based in
Australia. Hence, around the eight distribution channels, IGA supplies around 1400 grocery and
food products to more than 1,500 sovereign retail groceries. Moreover, IGA is in charge of the
distribution and marketing of over 1,100 food and grocery stores.
Campbell's wholesale is another Metcash customer. Campbell's wholesale is divided into
four leading specialists. They include; Campbell Cash & Carry, which is composed of 24 cash
and carry stores, Campbell wholesale comprising of 19 distribution centers and Convenience
Store Distribution (CSD) comprising of five convenience stores. However, these wholesalers
operate both locally and internationally. CSD record the highest sales amounting to 51% in
profits in 2006.
On the other hand, Campbell operates more than 42 wholesale stores based in Australia.
Moreover, these wholesale stores contain about more than 12,000 products which are supplied to
more than 50, 000 restaurant and retail customers. According to reports, Australian Liquor
Marketers is the top wholesale retail that provides and distributes Liquor. The retailer has 16
distribution centres to enhance the distribution and supplies of Liquor to the customers. Reports
reveal that Metcash has a variety of customers in other regions such as New Zealand and South-
east Asia. The large high number of retailers and customers has enabled the company to attain a
high revenue. Reports show that in 2002 the company had revenue of A$6.2 billion (Shee, at el.,
p512).
Metcash has a myriad of suppliers that supply them with numerous products. These
supplies have made it possible to satisfy the increasing customers demand inside and outside
Australia. Some of these supplies include; Nu-Pure Beverages, Unilever Australia, Henkel

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Australia, Fonterra, One Harvest and many more. Thus, the supplier provides Metcash with a
variety of products such as beverages, food, homecare and hardware products.
Metcash supply chain diagram (figure 1)
About the Metcash supply chain diagram (figure 1)
Met cash receives different products from its supplies such as Nu-Pure Beverages,
Unilever Australia and others (Mbhele, p.140). Hence, upon receiving those products, Metcash
distributors determine the best store for the products. Reports show that Metcash have
established different stores for a different product in various regions (Mo & Lorchirachoonkul,
p.18). Hence, the suppliers deliver the product to specific stores.
Additionally, after receiving the products from the supplies, Metcash distributes the
product to its retailers such as IGA, Campbell Cash & Carry and Australian Liquor
(Christopher). These retailers have a variety of wholesaler stores where they store their product
before delivering to the final consumer. Thus, the three retailers are the pillars of Metcash
Metcash Distributors
Unilever
Australia
IGA
Australian Liquor
Marketers
Nu-Pure
Beverages
Campbell
Cash & Carry
Customers

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distributors, which ensure that the consumer receives the product at the right place and time.
Therefore, the supply chain management system has enabled Metcash Distributors to run its
operation. Hence, Metcash has been able to realize a high amount of revenue since it’s for many
decades.
Metcash transportation network
Research shows that Metcash has a well-established transportation network. Furthermore,
that Metcash distribution center uses various transportation network to deliver the product to the
supplies. Recent reports indicate Metcash entered into a contract with DYERS in 2002. By this
time John Clements was the sole leader in DYERS (Feldman, p.44). DYERS have the latest
transportation facilities such as vehicle which enhanced the transportation of Metcash products.
DYERS have enabled Metcash to attain hire milestones in Australia and other regions
around the globe. Their flexible means of transport have enabled Metcash to meet demand. Also,
DYERS have got professional drivers and employees who make sure that Metcash products are
safe and are delivered in the right quantity. Moreover, DYERS has well-developed transport
facilities for delicate products such as beverages and foodstuffs. Hence, DYERS relieves
Metcash from the loses that may be incurred during transportation. The partnership between
DYERS and Metcash has enabled both companies to attain high economic of scale in the long
run.
Moreover, Metcash have also partnered with various subcontractors that facilitate the
transportation of their product to the retailers. Such subcontractors include; the C-Store
distribution and Liquor Distribution (Corkindale, p.421). These subcontractors are essential to
Metcash company since they facilitate the delivery of Metcash products to the final consumers.
Moreover, they offer a reliable transportation network, thus enhancing constant product

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distribution. Hence, the company can meet the increasing demand of consumers across different
regions. Furthermore, transportation network such as DYERS facilitates the delivery of Metcash
products to oversee customers. Hence, they provide shipping transportation across various areas
which are outside Australia.

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Reference List
Browne, E. and Levy, M., 2011. Competition law: Metcash-a new paradigm for merger
analysis. Keeping Good Companies, 63(11), p.672.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Corkindale, D., 2015. A Wild Child goes overseas. Marketing, p.421.
Dawson, J., 2010. Changes in food retailing and their implications for new product development.
In Consumer-Driven Innovation in Food and Personal Care Products (pp. 25-52). Woodhead
Publishing.
Feldman, R., 2014. Dyeing and the London Dyers’ Company: membership, craft, and knowledge
transmission, 1649–1829. The London Journal, 39(1), pp.37-58.
Hay, G.A. and Murdoch, E., 2013. A Tale of Two Cities: From Davids Holdings to
Metcash. Cornell Legal Studies Research Paper, (13-10).
Hay, G.A. and Murdoch, E., 2013. A Tale of Two Cities: From Davids Holdings to
Metcash. Cornell Legal Studies Research Paper, (13-10).
Hoffman, T. and Babb, C., 2016. Road Freight Activity in Perth’s Grocery Supply Chains.
In Planning Boomtime and Beyond (pp. TBA-TBA).
Mbhele, T.P., 2012. Central supply chain distribution system diffusion in the selected retail
grocery industry. International Journal of Information Technology and Business
Management, 14(1), pp.139-159.

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Mo, J.P. and Lorchirachoonkul, W., 2010. RFID infrastructure for large scale supply chains
involving small and medium enterprises. Sustainable Radio Frequency Identification Solutions,
pp.1-22.
Shee, H., Miah, S.J., Fairfield, L. and Pujawan, N., 2018. The impact of cloud-enabled process
integration on supply chain performance and firm sustainability: the moderating role of top
management. Supply Chain Management: An International Journal, 23(6), pp.500-517.
Sutton-Brady, C., Kamvounias, P. and Taylor, T., 2015. A model of supplier–retailer power
asymmetry in the Australian retail industry. Industrial marketing management, 51, pp.122-130.